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Political Economy Perspective Climate Finance in Bangladesh M. Zakir Hossain Khan TI-Bangladesh A Global Forum on Using Country Systems to Manage Climate.

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Presentation on theme: "Political Economy Perspective Climate Finance in Bangladesh M. Zakir Hossain Khan TI-Bangladesh A Global Forum on Using Country Systems to Manage Climate."— Presentation transcript:

1 Political Economy Perspective Climate Finance in Bangladesh M. Zakir Hossain Khan TI-Bangladesh A Global Forum on Using Country Systems to Manage Climate Change Finance 3 December 2013, Seoul, Korea (South)

2 National Adaptation Action Plan 2005 Bangladesh Climate Change Strategy & Action Plan (BCCSAP) 2009- Estimated Cost of $5 billion (FY2014-FY2018); Key pillars are- Food security, social protection & health; Comprehensive disaster management; Infrastructure; R&D management; Mitigation & low carbon development; Adaptation, capacity building and institutional strengthening Bangladesh Climate Change Trust Fund (BCCTF) Act, 2010 – Budgetary allocation from govt. for both GO and NGO/Private Bangladesh Climate Change Resilience Fund (BCCRF), 2010 – Multi-donor trust fund (Grant) – “New and Additional” Grant Pilot Program for Climate Resilience (PPCR) – Multi-Development Banks Fund (Grant +Loan) Other funds from developed countries/IFI, e.g. PPCR, GEF 2 Climate Finance Governance in Bangladesh: Policy Level Developments

3 3 Background: Climate Change Finance Governance in Bangladesh  In the 2012 Corruption Perception Index, Bangladesh scored 26 out of a possible 100 - perceptions of a high degree of corruption in the public sector  The Climate Governance Integrity programme was launched in six countries including Bangladesh in 2011 More funds higher possibility of corruption e.g. amalgamation with development aid

4 Verification and confirmation of report by stakeholders Information Sources Review acts, policies, process and practices; Applying Right to Information Act, Key informant Interviews for verification and confirmation or report Assessment Criteria (Overall and Institutions) Transparency (pro-active and on-demand disclosures); Accountability; Integrity and Anti-corruption; Independence; and Capacity Mapping of key actors, their roles in climate finance governance Funding, Coordination, Implementation and Monitoring actors Method-1: Process of Governance Assessment of climate finance in Bangladesh

5 Mapping of Climate Finance Actors and Accountability Map 5

6 6  First prepared a consolidated database on CF in Bangladesh Low Contribution of Annex-1 Countries

7 1. Inadequate disclosures on- a) Policy decisions-ToR between BCCTF/BCCRF and PKSF/World Bank fund approval and rejection process, criteria etc. b) Coordinating, implementing and monitoring– Financial, audit and MRV related reports; project info, engagement of affected communities in fund management; etc. 2. Lack of clarity on roles/functions of the World Bank in selection/managing projects Need the highest level of pro-active disclosures 7 Limited Disclosures/transparency

8 Fragmented Prioritization-noncooperation 8

9 9 Accountability challenged Absence of effective accountability mechanisms and safeguards (fiduciary, conflict of interest, integrity) Inadequate representati on of CSOs in decision- making bodies ; Unprotected whistle blowers in practices Partisan influence in funding decisions

10 10 Impacts Level of Impacts Additional Mortality/ Year Additional Economic Cost (Million USD/Yearly) Additional Person Affected (Yearly) 201020302010203020102030 Sea Level Rise High --125020,00040,00045,000 Agriculture Severe 6505,500 Floods, Landslide Acute 751003003000600,000900,000 Storms Acute 175025003501250400000600,000 Droughts Severe --1575-- Labor Productivity Acute 3,50030,000 HungerAcute 975015,00010,00015,000 Source: Climate Vulnerability Monitor Report 2012

11 11 Mismatch: Vulnerability and Funding Prioritization

12  Heightening of dyke and embankment is key adaption to Seal Level Rise  Even after 4 years of climate change induced cyclone AILA embankments were not reconstructed  50,000 victims people, mostly farmers, compelled to stay on the embankment at coastal region due to intrusion of saline water to their homes two times daily,  Lost livelihood; damaged soil, no croplands  Damaged surface and underground water tables – have to buy drinking water at 0.50 cents per Jar of 20 liter water capacity Faulty Prioritization within Sector Daily Star, 2 June 2013

13 Inadequate capacity of CSOs to challenge mal- governance due to lack of knowledge, in some cases, disunity and credibility deficits Less resources and limited focus to ensure competency/ capacity No practical oversight by the parliament; and No legal obligation of engaging affected community in funding decision 13 Unchallenged mal-governance: Capacity/Independence and Integrity Sumon/Age 20 Remember how to spell honesty

14 Step 1: Identify the actors with highest fund users Step 2: 16 Indicators Transparency/disclosures; accountability, Integrity and anti- corruption; Independence and Capacity Step 3: Collection of information (Both Policy and Practices) based on above indicators thru existing acts, polices and other docs; and KI Interviews Step 4: Report preparation and confirmation with stakeholders Step 5: Prepare policy brief for advocacy toward improved CFG policy, process and practices 14 Method-2: Institutional/ Key Actor Governance Assessment

15 15 Transparency in practices by Key CF Actor CriteriaBCCTFBCCRFMOEFPKSF (1a) Are there provisions in place for public access to information regarding the fund’s policies and procedures? Best case scenario Middle case scenario Best case scenario Middle case scenario (1b) In practice, can members of the public obtain relevant and timely information on the institution’s policies and procedures? Middle case scenario Worst case scenario Middle case scenario (2a) Are there provisions in place for public access to information regarding the institution’s activities, outputs and decisions? Best case scenario Middle case scenario Best case scenario (2b) In practice, can members of the public obtain relevant and timely information on the institution’s activities, outputs and decisions? Middle case scenario Worst case scenario Middle case scenario Translating policy into practices in disclosures should be ensured

16 Challenge: Climate Funds - Who will get what? 16

17 Step 1: Collect project proposal applying RTI Act and review project papers Step 2: Identify all project implementation related stakeholders Areas of tracking a) particular project approval/rejection phase; b) project implementation phase Step 4: Develop methodology for project monitoring Step 3: Indicators: for CF project tracking – pro-active and on- demand disclosures; accountability, Integrity; Independence and Capacity; Quality of work; Monitoring and Evaluation Step -5: Collection of information applying indicators thru KI Interviews, Field Visit, Focused Group Discussion with Community and social accountability tools etc. Step 5: Report preparation and dissemination with stakeholders Step 6: Prepare policy brief based and consultation with stakeholders. 17 Method-3: Tracking/Monitoring Project Implementation

18 18 Method-3: Tracking/Monitoring Projects Overall findings Unwillingness to disclose information by bidders and project staff Awarding bid from political consideration Lack of community participation in all stages of project implementation’ Low level understanding of local officials about climate change finance Lack of coordination and coherence among project related stakeholders Limited focus to ensure expected level of integrity, competency and capacity of fund users

19 Political connection in contracting Not have prior consultation with targeted Household Lack of proper monitoring and evaluation Faulty fund disburse may push the vulnerable people in the most vulnerable US $1400 @ per structures; total 2003 Faulty Design of cyclone resilient housing Faulty fund disburse may push the vulnerable people in the most vulnerable (Khadija Begum, http://www.lossanddamage.net/download/7096.pdf )Khadija Begum http://www.lossanddamage.net/download/7096.pdf

20 Approved project (US$ 2.9 million ) of Cross Dam without EIA, SI study Hide existence of protected forest in approved design Project site with reserve forest Approved design without forest site Suspension of project works for indefinite period 20 coordination of related implementing agencies Ignoring coordination of related implementing agencies

21 Award the contract or bid for reconstruction of dykes Reconstruction of dykes in coastal district Shatkhira Contract Value - $ 0.07 million Inflated Measurement- Shown less (7 ft) in estimates than actual height (10 ft) Value in offer awarded – 41.53% less than the original estimate Unauthorized Multiple sub- lease – Sale, re- sale of work- order Unauthorized multiple sub-leases engaging BWDB staff and concerned labors leader Finally works awarded to a concerned labor leader at almost 95% less (US$0.01 million) Identified failure of integrity in 10 issues out of 11 suspected areas 21 Integrity in Peril Ensure integrity and independent watchdog role during procurement works

22  Mapping of Key Actors of CF and Institutional Assessment have laid down for integrated/multi-prone authority/mechanisms rather than stand alone process – Integrated National Platform to handle CF comprehensively  More pro-active disclosures especially funding decisions and MRV reports  Safeguards to ensure integrity and restrict political influence, grievance mechanisms are key to expected return to investment of climate finance  Emergence of strong coordination across fund providers as well as fund implementing agencies  CF stakeholders should engage CSO and targeted community at all level of fund management for effective utilization of allocated funds  Watchdog role of CSOs should be formalized within public procurement act and climate financing mechanism  Need to build capacity of state/non-stake actors for effective watchdog role  Immediate evidence-based prioritization of funding Overall Lesson learned and way forward

23 (Corruption) Thank you zhkhan@ti-bangladesh.org www.ti-bangladesh.org 23


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